How to Start a Towing Business in Texas

by Pat Kelley; Updated September 26, 2017
From toys to a career.

The Texas Department of Licensing and Regulation administers laws dealing with tow truck drivers, tow companies and vehicle storage facilities. The TDLR issues licenses, inspects tow companies and investigates companies accused of wrongdoing. To operate a towing company in Texas, you'll need to obtain a license, insurance, and, of course, a tow truck

How to start a tow truck company in Texas

Step 1

Log on to the website for the Texas Department of Licensing and Regulation and find the section on towing. Find the section that deals has towing laws and frequently asked questions regarding towing licenses. Pick a catchy name and slogan so potential customers remember the name when they need your services.

Step 2

Buy a truck. Evaluate them based on cost, the types of tows you may perform (just cars or big trucks, too) and the weight of vehicles you may need to tow. You need a license for each truck you use. According to entreprenuer.com, buying a tow truck may cost more than $200,000. Learn to how to drive the truck and operate it safely.

Step 3

Identify a location where you can store tow vehicles. If you are going to operate a 24-hour towing service, you will need a location where the owners of vehicles can retrieve them 24 hours per day. Limited-hour towing operations must be able to give owners their cars back within one hour of being contacted between 8 a.m. and midnight. The storage facility and attending employee must have licenses. You can purchase the facility or rent one. Take security at the yard into consideration.

Step 4

Obtain insurance. Texas' towing statute requires towers who hold an "incident management license" to obtain $500,000 in liability insurance and $50,000 in cargo insurance. Towers who hold or want to hold licenses for private property towing permits or consent towing permits must obtain $300,000 in liability insurance. If you have employees, you will need to obain worker's compensation insurance. If you own the garage, you'll need insurance for that. The Texas Towing and Storage Association may be able to help you find insurance carriers.

Step 5

Obtain licenses. The TDLR has several forms you will need to fill out to obtain licenses for your truck, your towing operators, your storage facility and your storage facility employees. You may spend several thousand dollars in fees.

Tips

  • In addition to state regulations, local governments may have towing regulations, such as towing charge limitations, that can hinder your profitability. Starting the business is only a small part of the process. You will need to develop systems to pay taxes, meet payroll and comply with government regulations.

About the Author

Philadelphia-based freelancer Pat Kelley has been writing since 2002, most recently for Scripps Texas Newspapers. He has won numerous awards for reporting. He holds a Bachelor of Arts in political science.

Photo Credits

  • towing truck image by Aleksandr Ugorenkov from Fotolia.com